Keep the Faith : Investment Protection Following the Denunciation of International Investment Agreements

The article addresses the consequence of denunciation of international investment agreements for investor rights. It critiques the prevalent point of view that the termination of international investment treaties terminates a standing offer of the state to arbitrate disputes with foreign investors – and as such also terminates the substantive protections included in the treaties containing such a standing offer. The article explains that the prevalent point of view is premised in the law of contracts and analogizes investment protection to offer and acceptance in contract law. The article demonstrates that the analogy is not aptly drawn because the law of contract would analyze similar problems in commercial transactions under the law of third party beneficiaries rather than offer and acceptance. The law of third party beneficiaries vests the rights of investors at the time of reliance rather than at the time of acceptance. The article uses this insight to explore how the triangular relationship between home state, host state and investor is captured in international law. It concludes that treaty commitments made between the host state and the home in an international investment agreement constitutes a unilateral act addressed to foreign investors. As such, they create rights in international investors. These rights may not be arbitrarily withdrawn or frustrated. It is this analysis, rather than the analysis of offer and acceptance that governs the legal consequence for the investor of termination of an international investment treaty inter partes